Shares of Suntory Beverage & Food are coming down to earth. In the two weeks after the eagerly awaited July 3 listing on Tokyo Stock Exchange—in a $3.9 billion IPO, Japan’s biggest of the year (and the second largest globally)—the price surged 20%. But Suntory has since been on a woeful losing streak. In late trading Tuesday, shares were off 2.2% at ¥3,485 ($34.95), down for the fourth straight session and bringing the loss for that span to 5.5%.

A Suntory vending machine in Tokyo

Reuters

The prospect of being added to the Morgan Stanley Capital Index was obviously a big driver in the surge, say analysts. But since that happened, on July 17, the stock has turned south.

“Valuations are now normalizing,” said Monex market analyst Toshiyuki Kanayama. “The stock is still 12% above its ¥3,100 IPO price, which is respectable. As long as it can hold above that mark, no alarm bells will go off.”

“Clearly the 20% run-up we saw immediately after listing was overdone,” says an equity trading director at a foreign brokerage. “There have been rumors about the bookrunners’ helping to keep the listing price up in the face of a great deal of individual investor selling, especially in the first few days after listing, but the stock appears to be holding its own three weeks on, so fears of a capitulation are probably overdone.”

Half of Suntory’s shares were distributed domestically, with 90% of those going into the hands of individual investors, raising some concerns about sudden selling pressure. But that has yet to materialize.

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